Relative to his plans to tax pension income, Snyder has recently gone public with the claim that under his plan, a typical retiree with under $40,000 in pension income and a homestead will have to pay no additional income taxes.

Listen to his words carefully. His statements mislead one to believe that $40,000 in pension income will be excluded from taxation. Nothing could be further from the truth.

In fact, Snyder stills plans on taxing all of a retiree’s pension income. However, for a retiree with a typical homestead tax credit, these funds (which were historically refunded to retirees) will instead be applied to negate the new income taxes up to approximately $40,000 in income.

Thus, the retiree’s homestead tax credit is being taken away to apply to the income taxes on the first $40,000, then a retiree has to pay more income taxes on any income over $40,000.

A retiree with no homestead tax credit will, in effect, pay income tax on all of their pension income.

The net effect under either scenario is that the out-of-pocket money taken from pensioners under Snyder’s plan will result in the full taxation of their pension income.